NLRB: Because We Said So

The National Labor Relations Board's recent decisions have expanded its oversight of the workplace to places never envisioned by the federal law that created it, writes one of the 2012 Most Powerful Employment Attorneys.

This article accompanies The Trouble with Retaliation.

Saturday, June 16, 2012
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The "Employee Rights" poster the National Labor Relations Board wants all employers to post is instead hung up in court battles ... for the time being.

To date, the brouhaha raised about the poster has been based largely on doomsday assertions that the poster will stimulate union organizing (which it may), but that focus misses the point.

The stimulation of union-organizing may be a relatively small piece of the Labor Board's much-broader strategy to tilt the workplace steeply toward employee rights, thereby radically changing the way Americans conduct business.

This strategy has ramifications way beyond whether the employees are represented by a union, and it is already having a far more dramatic effect on nonunion employers than could any reinvigoration of the labor movement.

The effort keys off informing and energizing nonunion employees to assert a panoply of rights allegedly protected by the National Labor Relations Act in ways and situations not contemplated by the NLRA when it was passed in 1935. It was last amended substantively in 1947.

These rights now being discovered by the Labor Board have little or nothing to do with unions. In expanding the reach of the NLRA into every aspect of the workplace -- particularly those without a union -- the Labor Board has been relying extensively on the polemics of ipse dixit --"it is so because we say it is so."

Regardless of whether the NRLB's actions are supported by the NLRA, nonunion companies are being forced to re-evaluate how they treat and control employees, or suffer the considerable consequences that may be directed by the Labor Board.

First, The Law

The National Labor Relations Act protects an employee from interference, discrimination or retaliation for contesting, protesting or seeking to improve his/her wages, hours, terms of employment, working conditions or treatment.

All that is necessary is that the employee act either with or on behalf of another employee. Typically, and as contemplated by Congress when it passed the NLRA, "working with or for the benefit of another employee" means "union activity."

Not any more, says today's Labor Board.

Any time an employee engages in conduct that meets the above definition, the employee is engaged in protected conduct and is entitled to litigate that right before -- and obtain relief from -- the Labor Board. The NLRB has the power to obtain injunctions, to order employers to reinstate discharged employees to their employment with full back pay and benefits, to rescind discipline and to force employers to engage in other curative activities, such as reading admissions of guilt, apologies and lists of employee rights (including the right to have a union) to assemblies of their employees.

Where the Labor Board perceives the possible involvement of a union, the employer may be ordered to permit union organizers to attend meetings of employees and address them during the work day, and to permit employees to use the employer's email system to solicit each other to engage in group protests against the employer.

By decoupling the NLRA from union activity, today's Labor Board has injected itself into nearly every aspect of the employment relationship. Because nonunion employers have rarely been confronted with the enforcement of the NLRA outside the context of a union, this shift in focus of the Labor Board hits unexpectedly and hard.

Assault on Private Arbitration Agreements

Over the last decade or so, employers have used private arbitration agreements to avoid expensive and protracted employment-related litigation. One of the most attractive of the multiple benefits of this is the elimination of collective or class-action lawsuits.

It goes like this: The employer obtains or forces an employee to sign an agreement to settle all employment-related claims through binding arbitration. Included in the agreement is a waiver of the right to bring a claim as a collective or class action.

In a world where employers are having to pay millions to defend collective or class actions alleging violations, for example, of the Fair Labor Standards Act (wage-and-hour laws) or the laws against harassment, limiting claims to those of a single individual -- without the cost of massive discovery involving large classes of employees -- is a huge benefit.

The individual claims, taken alone, are too small and the need to bring hundreds or thousands of individual cases is too consuming to be of interest to predatory plaintiffs' lawyers.

Not so fast, says the Labor Board, deciding that private arbitration agreements that waive class and collective actions violate the NLRA and are unenforceable.

In D.R.Horton, Inc., 357 NLRB No. 184 (January 3, 2012) and in 24 Hour Fitness USA, Inc., 20-CA-35419 (April 30, 2012), the Labor Board, and then an Administrative Law Judge of the Labor Board, held that waivers of collective or class actions in voluntary arbitration agreements unlawfully interfere with the protected right of employees to engage in activities together for their mutual aid and welfare.

While some have argued (and we agree with this argument) that these cases will be reversed when they make their way through the federal courts, the Labor Board will not recognize an individual court decision, except as to that single case, and will continue to apply the law as it sees it until instructed not to by either Congress or the Supreme Court.

That will take time. In the interim, employers lose one of the primary benefits of such waivers because the Labor Board reached far beyond anything having to do with the right of a union to represent employees.

Washing Windows

The Labor Board has decided numerous cases over the last three years that are calculated to permit and preserve the right of employees to discuss between themselves, with outsiders and in public, information that the employer believes to be confidential -- the release of which would be damaging.

In doing this, the Labor Board is washing the windows of business to permit the public to view, often with distortion, the way the employer treats its employees.

Employee conduct on social-media sites has been particularly hot for the Labor Board. In fact, the issue is so hot that the acting General Counsel of the Labor Board twice has issued summaries of cases that detail the facts of the multitude of cases in which he has instructed his staff lawyers to file formal complaints against employers of all sizes.

The fact pattern of alleged violations of the law are pretty common: The employer establishes a rule that prohibits employees from posting confidential information (usually undefined and, therefore, inclusive of wages, benefits and treatment by supervisors) or comments that disparage the employer or another employee on their social media site.

An employee complains on her Facebook page that her wage of $15 per hour is substandard, her employer is exploitive, her supervisor a dirty pig and/or another employee a goodie two-shoes.

The employer becomes aware of the posting and fires or disciplines the employee for releasing confidential information and/or disparaging the employer (supervisor) or another employee.

In these cases, the Labor Board routinely will order the employer to reinstate the employee to employment with full back pay and benefits (or rescind the discipline) and post a notice to all employees that informs them that they can post things on their social-media sites that criticize the company as an employer.

The Labor Board's reasoning is that the rule interferes with or punishes an employee for discussing with or, on behalf of, other employees the terms and conditions of employment. Hence, the rule violates the NLRA and must be remedied.

All sorts of internal company rules of conduct have come under attack both when they are used to discipline or discharge an employee and when read by the Labor Board while investigating an unrelated charge.

For example, rules against profanity would violate the Act because sometimes employees who feel strongly about the employer's substandard wages or benefits become excited and use naughty words.

Rules that require employees to deal with each other appropriately and in a respectful way would also violate the Act because they are too vague and a disgruntled employee may hesitate to discuss working conditions energetically with another employee.

Even a rule prohibiting harassing another employee for reasons other than the employee's protected status (e.g., sex, race, age, national origin, religion) has been held to violate the Act because it would "chill" an employee's willingness to object to conduct by his employer for fear that the employer would perceive the objection to be harassment.

In Design Technology Group, LLC d/b/a/ Bettie Clothing, 20-CA-35511 (April 24, 2012), for example, the Labor Board's Administrative Law Judge reversed the discharge of an employee for releasing wage-and-benefit information to third parties and other employees.

According to the ALJ, following the recent precedent of the Labor Board, the conduct was protected, regardless of the privacy interests of the employer. After all, how can an employee effectively complain about her wages and get the aid of a union organizer if she cannot use the information without violating a rule?

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Even rules prohibiting the use of the employer's name and logo in an Internet posting and rules prohibiting complaining about wages or benefits to a customer have been found to violate the NLRA. The former would inhibit communications critical of the employer and the latter would prevent enlisting the public in an effort by employees to change their working conditions or terms.

In all of these ways, the Labor Board has injected itself into every workplace in America and imposed its own view of what is right or wrong, without concern for the business implications of their judgments.

Even the routine process used by competent and trained human resource professionals to investigate employee complaints has been attacked by the Labor Board.

In Hyundai America Shipping Agency, Inc., 357 NLRB No. 80 (August 26, 2011), the Labor Board found that the admonition to an employee by a human resource professional investigating another employee's complaint to keep their discussion confidential violated the Act because it inhibited an employee from talking about it with other employees and engaging in concerted or group activity.

The admonition was not limited in time and the employer was not able to show that confidentiality was "necessary."

Expanded Whistleblower Rights

Many laws protect whistleblowers: Fair Labor Standards Act, Family and Medical Leave Act, Occupational Safety and Health Act, Title VII of the Civil Rights Act, Dodd Frank and on and on. What do all of these have in common? Employees acting together or on behalf of others.

The Labor Board reasons, therefore, that whistleblowers or complainants under any of those statutes may also have their rights under the NLRA violated because the retaliation is for engaging in conduct protected by the NLRA.

In 47 Old Country, Inc, 29-CA-30247 (April 3, 2012), the Labor Board found that an employer that operated a nail salon violated the Act when he gave the employees who had filed a collective wage-and-hour complaint with the Department of Labor the impression that he was watching them, gave them disciplinary notices, told them that the company may have to go out of business, reduced their wages and, finally, discharged one of them.

The employer was ordered to reinstate the employee who had been fired with full back pay, rescind discipline and post a notice that confirmed that the employees had engaged in protected activity and pledging that he would not interfere with them for that conduct again.

Clearly, found the Administrative Law Judge, the employees were acting together with regard to a term of their employment and, therefore, were engaged in conduct protected by the Labor Act. The fact that they were protected by the whistleblower provisions of the Fair Labor Standards Act was irrelevant. The employees were free to find a forum that was not only favorable to employees, but also a forum -- the NLRB -- that may be more willing to order effective remedies than the DOL.

A Whole New Paradigm

The Labor Board has created a whole new paradigm for employers. While it is knee-jerk for every HR professional and employer to scrutinize policies, rules, conduct, discipline and discharge to ensure that no group protected by the civil-rights laws are adversely affected or that the contemplated action is not affected by someone's race, religion, gender, age, etc., it is not knee-jerk to consider whether an employee has engaged in conduct protected by the National Labor Relations Act.

Also, there are common employee rights that exist under the Act that exist only tangentially or infrequently under the other laws.

These peculiar rights are both commonplace for the Labor Board and uncommon for the decision trees of most human resource professionals. The right to act in private, the right not to be monitored, the right not to be interrogated about activity or others who may be involved in the activity, the right not to be threatened and the right not to be coerced with promises in order to induce the employee to cease the conduct are only a few of these special rights to the NLRA.

Just Because They May

At the fringe, the Labor Board also has acted to protect those who have not yet but at some time may engage in protected activity. Cervantes would be proud.

In Perexel International LLC, 190 LRRM 1034 (January 28, 2011), an employee complained about her wages. There was no evidence that the employee had spoken to any other employee and her complaint was focused only on her.

Because the employer viewed her as a possible troublemaker who may create dissention amongst the employees, the employer terminated the employee before she could do any damage. The Labor Board ordered the employer to reinstate the employee with full back pay and benefits because the employer's preemptive action was out of concern that the employee may engage in activities protected by the NLRA.

Quixotic ipse dixit.

James R. Redeker is a partner at Duane Morris LLP in Philadelphia, where he represents both organized and unorganized companies in their personnel and labor relations.

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